Consolidated Tax Bill Can Cause Mistakes On Sale Of Property

Q: I have been caught up in a real estate nightmare. I purchased a single family home earlier this year. Last month I discovered that I was conveyed two lots instead of one. I talked to people at the tax assessor’s office and they confirmed that several years back, a prior owner took the two lots and consolidated them into one tax bill. As far as I am aware, the prior owner might not have even known about the consolidation of the lots.

The previous owner is a “big wig” who owns a lot of land in the local area. I believe this was an oversight by him and his attorney. No one has given me any guidance. I have been told by numerous attorneys that they’ve never heard or seen anything like this.

How do I advise the previous owner that I actually own both properties and get keys for the second property? Can I separate the properties and sell the other lot? Do I need an attorney?

A: There are several issues to discuss. Generally, every parcel of real estate must have an identification number for real estate tax purposes. If you were to buy several parcels of land, you’d expect to have an identification number for each parcel.

But if you owned several parcels of land and only wanted to receive one tax bill for all of them, you’d work with the local tax assessor’s office to consolidate the parcels into one tax bill for all of them.

In many places, when you want to consolidate parcels of land into one tax bill, the local authorities would require you to also change the legal description for those parcels so that they would no longer be identified as two different parcels of land. The street address would probably not change, but the description for those properties used in legal documents would change.

But in some places, you can get one tax identification number for various parcels of land without changing the legal description for those parcels. And this is what appears to have occurred in your case. You have one tax identification number for multiple parcels of land and you received both parcels when you purchased your home.

From your question it seems that you received more than you expected.

Usually people have a pretty good understanding of what they are buying when they close on a home. Your real estate contract should indicate the street address of the property you were to purchase. And at settlement, there should have been three other documents that you should have received to match your contract: the deed, the survey and the title insurance commitment.

The deed is the document that conveyed title of the home to you. The description on that deed should have matched the description on the plat of survey. The plat of survey was the document that depicted graphically the dimensions of the land you were purchasing along with a depiction of the homes on that land. Finally, you should have had a title insurance commitment from a company that would insure your rightful ownership in and to the land you were buying.

If all the documents matched, it should have been pretty clear at the time of your settlement what you were buying. If you didn’t review or understand these documents, that’s unfortunate. Because if the seller made a mistake in conveying more land than he intended and you know that it was a mistake, the mistake can and should be undone. Since the seller made the mistake, the seller should pay to undo the conveyance of that part of the land that you were not entitled to purchase.

When you and the seller clean up the mistake, you can have the seller file the appropriate documents to clean up the tax issue so that in the future you get a tax bill for only the property you own. You will probably need the help of a real estate attorney on this issue. Also, if you live in a state in which the settlement agent prepares the closing papers, you may want to talk to a real estate attorney to cover yourself and, perhaps, have the settlement agent correct the problem if they were at fault.

Finally, if the intent was for you to own all of the land, then in that case you are entitled to possession of all of the property. If there are people living in an adjacent property, they may still have the right to remain on the property as your tenants. Here again, you’ll need to talk to a real estate attorney to determine when you can get possession of that part of the land.

When you purchased the property, you probably purchased the property subject to the rights of parties that might have been in possession of the property. Please email us to tell us how things end up.

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Definitioner

Title Insurance is insurance that protects the lender and the property owner against losses arising from undisclosed defects or problems with the title to property.

Title

Title refers to the ownership of a particular piece of property.

Real Estate Attorney

A Real Estate Attorney is an attorney who specializes in the purchase and sale of real estate.

Real Estate

Real Estate is land and anything permanently attached to it, such as buildings and improvements.

Possession

Possession is being in control of a piece of property, and having the right to use it to the exclusion of all others.

Ownership

Ownership is the absolute right to use, enjoy, and dispose of property. You own it!

Agent

An Agent is an individual who acts on behalf of a consumer. A real estate agent represents a buyer or a seller in the purchase or sale of a home. Licensed by the state, a real estate agent must work for a broker or a brokerage firm. An insurance agent helps a consumer purchase an insurance policy. Insurance agents are also licensed by the state.